Tesco 'well-placed for recovery'

Tesco chief executive Sir Terry Leahy has said that the supermarket chain is "well-placed for the global recovery" after reporting "solid" results.

Britain's biggest retailer's pre-tax profits for the six months to the end of August came in at £1.42bn, which was up 1.5% on the same period last year.

Group sales rose 8.3% to £30.4bn while like-for-like sales in the UK, which exclude new stores, grew 2.7%.

Tesco also announced it had created 6,500 jobs in the six-month period.

Tesco's statement said its strategy had "delivered pleasing growth in challenging times".

'Slow and steady'

It said that its Discount Brands, which were launched a year ago, and extra investment in its Clubcard scheme were working, and that it was "starting to see significant improvement in our relative performance versus our main competitors".

It added that the strongest response to the Clubcard investment had been more regular visits from customers who had previously been occasional shoppers at Tesco.

Check Tesco's share price

Market research firm Nielsen said this month that Tesco's sales had outperformed Sainsbury's in the four weeks to 5 September for the first time for a year.

In the early stages of the recession, Tesco had been losing market share to rivals such as Sainsbury and Asda and to discount chains such as Aldi and Netto.

Sir Terry told the BBC that he was expecting a "slow and steady" economic recovery.

"The recovery is happening - we're through the low-point - obviously helped by growing signs of stability from the financial sector," he said.

"You can see consumers gradually gaining confidence and being prepared to spend again."

Tesco Bank

Tesco announced in July 2008 that it would be buying the 50% of Tesco Personal Finance that it did not already own from Royal Bank of Scotland.

It has now announced that it will change the name to Tesco Bank.

The unit - which made sales of £420m in the six-month period - is due to begin offering current accounts soon, although no date has yet been set.

But Tesco has disposed of one rumour, which was that it was considering buying Northern Rock from the government.

The firm's finance director Laurie McIlwee told the BBC: "We're not."

E-mail this to a friend

Printable version